Is the Company required to proceed against the Browns Chicken franchisee before collecting from the guarantor?

Based on the 2025 Browns Chicken Franchise Disclosure Document, the document does not specify whether Browns Chicken is required to proceed against the franchisee before collecting from the guarantor. The FDD mentions that the selling franchisee and its owners will remain liable (and will execute a guaranty if requested by Browns Chicken) for the performance by the transferee of its obligations under the Franchise Agreement. This suggests that a guaranty may be required in certain transfer situations. However, the FDD does not detail the conditions or order in which Browns Chicken can pursue either the franchisee or the guarantor in case of default.

Typically, franchise agreements outline the circumstances under which a guarantor's obligations are triggered. Some agreements may require the franchisor to first exhaust all remedies against the franchisee before pursuing the guarantor, while others may allow the franchisor to proceed directly against the guarantor. The absence of this information in the provided FDD excerpts means prospective franchisees need to seek clarification on this point.

Therefore, it is important for a prospective Browns Chicken franchisee to ask Browns Chicken directly about the specific terms of the guaranty agreement. Specifically, they should inquire whether Browns Chicken is obligated to pursue the franchisee first before seeking recourse from the guarantor. Understanding these terms is crucial for assessing the full extent of the financial risk associated with the franchise agreement, both for the franchisee and any potential guarantors.